bmi Appalled by CAA Decision

3rd Mar 2003

bmi, Heathrow`s second biggest carrier and the UK`s second largest full service scheduled airline, today said it was appalled by the news that the Civil Aviation Authority had rubber-stamped a massive increase in BAA`s landing charges at Heathrow.Ê The decision means BAA will be allowed to increase charges by nine per cent this year and then by RPI plus 6.5 per cent each year over the following four years.

bmi finance director Nigel Turner said:

“The threat by the BAA not to invest in capacity if the increases were rejected has to count as the most successful game of call my bluff in business history. Heathrow is the biggest international airport in the world and the BAA already sits on a huge profit machine at the airport - but has now been able to hood wink the CAA into permitting the largest increase in airport fees in its history.

“The new costs will have to be passed on to travellers and the impact will be felt most on short-haul and domestic routes. If passengers refuse to pay these new charges then the viability of regional routes could be called into question.

“Despite the clear picture that has been painted by the airlines of the dire consequences of these increases, the regulator has caved in to the pressure for profits from a monopoly supplier.Ê We now have to consider our options carefully.Ê We are determined to fight these charges on behalf of the travelling public.”

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BAA, which has a monopoly at the South East`s three main airports, Heathrow, Gatwick and Stansted, has claimed the increase is needed to fund the construction of a fifth terminal at Heathrow.Ê bmi and other airlines have criticised both the concept and the business case for the cost of Terminal 5 and of having to pay for infrastructure services in advance of their completion and the capital funding calculations used by BAA.